Leftward Shift

Definition

A leftward shift of the PPC indicates a decrease in an economy's production capacity caused by factors such as natural disasters, war, or decrease in resources. It means that less output of both goods can be produced compared to before.

Related terms

Rightward Shift: An increase in an economy's production capacity due to factors like technological advancements or more available resources.

Economic Growth: An increase in an economy's ability to produce goods and services over time.

Factors of Production: Resources used in the production process such as land, labor, capital, and entrepreneurship.